January 01, 2012, to February 15, 2012
Fast-food diners would rather get smaller portions in their restaurant meals than read – and heed – calories postings, according to the U.S. study. When servers asked whether customers would like to “downsize” starchy side dishes at a Chinese fast-food restaurant 33 percent gladly cut back, saving an average 200 calories each meal. The offer of a discount on the down-sized meal had virtually no impact on the decision about smaller portions. The researchers said they hoped the study would help restaurants understand that helping diners exercise portion control won’t alienate customers, a finding that may be “counterintuitive.” It is “an interesting and easy strategy to implement that could help their customers make healthier choices,” they said.
U.S. researchers have discovered that use of light-emitting diode (LED) lighting in grocery store meat refrigeration units extends the “color shelf life” of some beef products, saving the retail meat industry millions of dollars a year. In addition, the LED lights save money by lowering the operating costs of refrigerated cases. The color of fresh meat changes during refrigerated display because of its natural chemistry and exposure to oxygen. Customers often reject meat when it loses its fresh-looking red color. Discolored meat products must either be discounted or discarded, which costs the meat industry up to a billion dollars each year.
SuperValu has introduced its Essential Everyday private-brand line at more than 2,000 independent retail stores in the United States. The rollout, which is expected to be completed by early 2013, will replace the company's Flavorite, Richfoods, and Homelife brands and will cover more than 2,400 products in the essential grocery and home goods categories.
December 15, 2011, to January 01, 2012
Though more and more men have been doing the grocery shopping and managing the household for decades, the recession – and the increase in layoffs – seems to have kicked the trend into high gear. The biggest of U.S. food and personal products makers have recognized the sea change and are paying closer attention to men, marketing products and rearranging store layouts to cater to them. Market researchers have noticed that males aged 18 to 50 are content to do the grocery shopping themselves or at least participate. GfK MRI and ESPN report that 31 percent of men nationwide are now the primary household grocery shoppers, more than double the 14 percent in 1985. And a Yahoo! survey of 1,000 fathers found that 51 percent were the primary grocery shoppers in their household.
Shares of U.K.-based Asda Supermarkets, a subsidiary of Walmart, are trading well as the company’s 500 stores report healthy sales during the holiday season compared to competitors. Food sales are robust, and non-food sales are doing at least as well as at other retailers, though special sales don’t kick in until December 26 (Boxing Day in the U.K.). Asda’s performance contrasts starkly with other retailers and high street chains that are already heavily discounting to lure customers before December 26. In terms of food sales, Asda has been running a steady "10% cheaper" price guarantee rather than launch end-of-year sales like its competitors. "We'll enter 2012 as a growth business," an Asda exec said.
Consumers on a tight budget this holiday season have made dollar stores a favored destination for Christmas shopping. Many of the stores have done their best to provide a more attractive shopping venue, having spruced up their facilities and product lines to better meet the needs of budget-conscious gift givers. Industry observers expect dollar stores to turn in healthy sales performances as the job market and economy continue in a slump: fourth quarter sales increases of at least 4.2 percent are forecast for stores that have been open at least a year. Dollar stores have expanded rapidly in recent years, with several chains operating thousands of outlets across the country.
December 01, 2011, to December 15, 2011
After rolling out advanced POS technology at its 2,500 nationwide stores, British retail pharmacy Boots announced it is implementing personalized point-of-purchase options for its 16.8 million Advantage Card holders. Customers now receive personalized voucher offers generated at checkout. Boots joins other retailers using technology to enhance offers at the point of purchase. Sainsbury customers, for example, receive a voucher at checkout that refunds the price difference if branded goods cost less at other stores.
The Kroger Co. reported a third quarter profit of $195.9 million (or 33 ¢ a share) on sales of $20.6 billion. Though sales over last year’s third quarter were up 10.3 percent, profit dropped slightly (3.12 percent). Identical supermarket sales, without fuel, increased five percent in the third quarter over the same period last year, marking 32 consecutive quarters of identical supermarket sales increases. CEO David B. Dillon said third quarter financial performance was ”outstanding,” thanks in part to a “Customer 1st strategy” being implemented by sales associates. Based on the consistency of the results, the company raised its earnings per share guidance for the year to between $1.95 and $2.00. The previous range was $1.85 to $1.95.
Germany’s grocery retail chain Metro Group said it will develop convenience stores in Ukraine that will be operated as franchises. In lieu of paying royalties, the Moy Magazin stores will have to purchase goods from Metro Cash & Carry hypermarkets at a five percent discount. The new chain will start with ten pilot stores established in the eastern region of the country. The company expects to increase sales to small-scale wholesale companies, which account for 40 percent of the Metro Group's joint turnover.
November 01, 2011, to December 01, 2011
Marketing Week provides numerous examples of how companies are applying interactive technology to outdoor marketing campaigns to boost and extend consumer awareness of brands through “experiential” activity. Smart outdoor media lengthens “dwell time” for brands such as Heineken, Lynx, Green Giant and British Airways by persuading consumers to interact with, for example, digital out-of-home (OOH) screens and other displays. According to Marketing Week, revenues tied to digital OOH reached £101 million ($156 million) in 2010. About 16 percent of the outdoor marketing expenditures last year were focused on OOH. A growing number of consumers – 60 percent according to a recent survey – want more interaction with digital OOH screens. Forty-seven percent are eager to download discount vouchers from OOH screens to their mobile phones.
Walmart has launched a campaign on Facebook that allows users to nominate nonprofit organizations from local communities to receive a slice of a $1.5 million grant pie during the holiday season. The "12 Days of Giving" campaign will accept submissions of local organizations that are providing basic needs such as food, shelter, clothing and baby supplies. For the campaign, which runs through November 30, Facebook users need to provide a 200-word description, with photos, of a local nonprofit that describes the organization’s impact on the community. Winners of the grant money will be announced on Facebook daily from December 12-23.
Consumers are gaining the upper hand in the buyer-seller relationship, The NPD Group reports, thanks to the increasing emergence of mobile devices, social networking and cloud computing. The trend is likely to continue for years, because shipments of smartphones and tablets are outrunning shipments of desktops and laptops. Within a couple of years, mobile commerce will surpass $100 billion worldwide. All of these trends suggest a huge opportunity for marketers who can connect with consumers and enrich customer relationships. But it requires a dedicated strategy for the development of viable mobile commerce models.
October 01, 2011, to November 01, 2011
A research scientist at Norway’s SINTEF Technology and Society says a lot of the Western world’s food supply is wasted by food producers, consumers and restaurants who believe that food has run out of shelf life, when in fact “it is perfectly OK.” According to Jan Ola Strandhagen, a third of the world’s supply of food could be saved using advanced technology – and a change in attitude – before it reaches the waste bin. Information from the retail food sector about consumer buying habits, and how much food ends up in store trash bins, would allow “surgical precision” in the production of food. That kind of information would influence the logistics of food distribution: “when and where, and in what quantities, individual products are delivered to retail outlets.”
Market analyst Euromonitor reports that the Japanese beauty and personal care market is enduring stagnant sales, even among traditionally downturn-resistant skin care products, thanks to the recession that began in 2008. Sales of cosmetics and personal care products in Japan dropped by one percent in 2010, compared to a two percent slide in 2009. Job insecurity and a dismal economic outlook have instilled a sensitivity to price, causing a swing toward cheaper mass products. And consumers willing to pay a premium for high-end cosmetics are looking for quality products that deliver value. The trend toward price-consciousness will probably push manufacturers to trot out products that will appeal to the mass market, intensifying competition. Also, greater interest in effective anti-aging solutions will likely force manufacturers to back efficacy claims with scientific evidence.
Retail grocery chain Supervalu Inc. reported a 2nd quarter profit of $60 million (28¢ a share), up from a loss in the same period last year of $1.47 billion. Sales in the quarter were $8.4 billion, down slightly from last year’s $8.7 billion. The company’s gross profit margin for the quarter was static at $1.9 billion compared to last year. According to the company, a small decline in gross margin as a percent of net sales reflects a higher LIFO charge and the impact of higher fuel sales. CEO Craig Herkert said the company’s “8 Plays to Win” strategy is picking up steam and a business transformation is moving ahead according to plan.
September 15, 2011, to October 01, 2011
Whole Foods Market and Earth University, which exports sustainably grown bananas, have partnered to send five shoppers to Costa Rica to learn about ethical banana production. The Whole Foods Market’s Earth University offerings include fresh bananas and frozen bananas and pineapples. The grocer’s Whole Trade program certifies growers for paying fair wages and providing safe working conditions, in addition to showing concern for the environment. Whole Foods shoppers can enter the contest by signing up online through September 30. Winners will experience Earth University’s hands-on teaching of sustainable agriculture, and responsible business and community development, the company said.
East Coast grocery retailer Stop & Shop has partnered with Unilever to donate $150,000 to Feeding America and member food banks during September to feed local children and families. The money will buy more than one million meals through hunger relief organizations such as regional food banks and pantries. Every dollar donated buys eight meals from Feeding America. Stop & Shop is conducting special promotional events in September in conjunction with the initiative, including Popsicle Parties and Stuff-A-Truck days. According to the companies, 25 percent of American children face hunger every day.
British retailer Tesco has contracted with NCR Corporation to install SelfServ Checkout stations in stores across Central and Eastern Europe. SelfServ Checkout allows customers to scan, bag and pay for products themselves. According to NCR, Tesco is the first retailer in the Czech Republic, Slovakia and Hungary to make self-checkout technology available. Self-service stations have also been installed in Tesco stores in the U.K., Ireland, the U.S. and South Korea. Tesco says more than ten million shoppers use them every week in the U.K., accounting for more than a third of store transactions.
September 01, 2011, to September 15, 2011
The competition is getting tough as home fragrance product marketers unveil new entries that cater to the demands of increasingly sophisticated consumers. Market data show that sales of home fragrance products at supermarkets, drug stores, and mass merchandisers (excluding Walmart) were essentially level – at about $850 million – during the year ending in July 2011. Upcoming new offerings include Halloween and fall season-focused candles; exotically fragranced candles and room mists; and spray, aerosol and plug-in air fresheners. Products are coming in high-end scents – vanilla bean fused with lavender? – and in novel shapes, like pillar candles. Meanwhile, Febreze is on a roll: air freshener revenue over the past 12 months hit $1 billion, and the brand was featured in 37 new product releases.
French retail chain Carrefour reported a 2.3 percent increase in sales in the first half of 2011 to €39.6 billion ($56.3 billion), but a drop in profit of €927 million ($1.3 billion), compared to a profit of €14 million a year ago. The company attributed the drop in profit to “unsatisfactory performance” in France and a “tough environment” in Europe. Weak sales and unsatisfactory profit performance were the key problems in France, along with underperformance in Italy and Greece. Latin America, however, experienced solid growth in sales, and included an “encouraging turnaround” in Brazilian hypermarkets. The company also reported good growth in China and a confirmed recovery in Taiwan.
An increasing number of companies are employing college students as their representatives on campuses in the United States to tap the student market; college students spent some $36 billion on computers, mobile phones, and other consumer products in the 2010–2011 school year, according to Re:Fuel. Brands hire popular students as “brand ambassadors” or “campus evangelists” to give out freebies and promote their goods and services. Some university officials, however, are uneasy over the practice, especially cases that entail extensive on-campus presence such as Target’s sponsorship of several school-year opening events for students. The trend, however, is likely to continue, with companies aware that college students are potential lifelong customers.
August 15, 2011, to September 01, 2011
Google has launched its Google Catalogs application that allows consumers to browse in one app catalogs from a range of retailers on their iPad tablet computers. The app includes interactive videos and additional content, links to online stores help in finding nearby retail outlets. Google plans to release an Android version of the application soon.
Walmart posted second quarter earnings per share (EPS) of $1.09, up 12 percent from $0.97 a year ago, on net sales of $108.6 billion, a 5.5 percent from last year. CEO Mike Duke said earnings per share were “near the top of our guidance” and reflected the “best quarterly performance since the third quarter of fiscal 2010.” Sales growth for Walmart International in the second quarter was more than 16 percent over last year to $30 billion, Duke said. He noted the progress made in integrating the acquired Netto stores in the U.K. and Massmart stores in sub-Saharan Africa. CFO Charles Holley said he expects 3rd quarter EPS to fall between $0.95 and $1.00.
After growing from 70 stores in 2007 to more than 300 stores in 2011 Walmart said it will focus its China business on smaller cities and online opportunities, both areas where the company sees faster growth opportunities. Walmart’s plans include opening supermarkets and Sam's Club warehouse markets in the country. China currently accounts for less than 10 percent of Walmart's revenue outside the United States although the market is expected to quickly grow in sophistication and size; sales revenue in China's retail sector is forecast to grow 14.5 percent annually to reach $5 trillion in 2016, according to Bloomberg News.
August 01, 2011, to August 15, 2011
Walmart, through its Acres for America program, has donated $500,000 to urban conservation projects in Chicago, Los Angeles, New York City, and Washington D.C. to help protect, conserve, and restore urban ecosystems. The donation will benefit urban conservation projects including the Anacostia Watershed Restoration in Washington D.C., Hegewisch Marsh Restoration in Chicago, Bolsa Chica Enhancement Project in Los Angeles, Jamaica Bay Salt Marsh Restoration in New York, and the New York Botanical Garden Lower Portage Trail, also in New York.
Consumer packaged goods companies are learning that promoting their Facebook and Twitter accounts in online ads, especially within the ad so users do not need to click away from the site they are on, leads to higher response rates. For example, Mrs. Meyers recently ran an online ad that posted consumer-interaction data much better than the industry's average figures, with 35 of every 1,000 online users clicking the ad's Learn More button, which leads to the brand's Web site, about 35x the average rate. Hyperlink seller Kontera designed an online ad for Kraft that highlights the food company's promotion deal with the TV program "Glee." Adding Facebook and Twitter content transforms online ads into something more alive, according to marketing expert and author Andy Smith.
Growing consumer demand for fresher fruits and vegetables has fueled interest in locally grown produce among grocery retailers and other food service providers. A start-up company is taking advantage of the trend by introducing an innovative way to provide fresh produce on or very near store premises. PodPonics, an Atlanta-based company that recently raised $725,000 in seed funding, has created what it calls a “disruptive technology” that grows fresh produce economically in refurbished shipping containers called "grow pods." The 320 sq ft pods, outfitted with organic hydroponic nutrient solutions and computer-controlled environmental systems, can produce an acre's worth of produce and can be stacked for efficient use of space.
July 15, 2011, to August 01, 2011
Whole Foods Market reported a 35 percent increase in third-quarter profit to $88.5 million (50¢ a share) on sales of $2.4 billion (an 11 percent increase over the prior year’s 3rd quarter). Comparable store sales increased 8.4 percent; identical store sales, excluding four relocations and one expansion, increased 8.1 percent. The company noted that it is continuing to gain market share faster than other public food retailers, mainly because of “value efforts, which have improved our price image,” as well as higher quality standards. The company is accelerating store openings and expects that “continued innovation and ongoing discipline around expenses and capital allocation” will lead to higher levels of operating performance and returns on invested capital.
Grocery retailer SuperValu posted a first quarter (fiscal 2012) profit of $74 million (35¢ a share) on sales of $11.1 billion. CEO Craig Herkert said the financial performance reflects progress on implementing its “8 Plays to Win” strategy. Retail food sales were $8.6 billion and independent business (formerly known as supply chain services) sales were $2.5 billion, both slightly lower than last year’s comparable quarter. The company reaffirmed its full-year guidance: it expects to generate fiscal 2012 earnings per share within a range of $1.20 to $1.40. The company expects sales for the 52-week fiscal year to be about $37 billion.
Walmart has appointed SymphonyIRI as its technology provider for its Customer Advantage Web-based collaborative planning and customer data management platform. The technology will utilize SymphonyIRI's Consumer Network and Liquid Data technologies and marketing analytics to help Walmart and its suppliers keep track of customers, their shopping behavior, and requirements. Manufacturers will also benefit from the system's features, which will let them understand better and provide for customers' needs. Customer Advantage will allow the retailer and its suppliers to collaborate to upgrade planning, marketing, and expansion planning, according to Walmart and SymphonyIRI.